Finding new growth in a mature market

It can often be a challenge to find new ways to grow in mature categories already purchased by most Australian households like Apples and Pears; however, Nielsen Homescan analysis reveals that there are pockets of opportunity for both. Focusing on particular varieties or packs; and increasing purchase frequency by inspiring consumers to use apples and pears on more occasions – have the potential to improve overall value and volume sales.

Apples

Over the past year, apple sales declined in both dollar value (-3.0 per cent) and volume (-3.3 per cent). This was largely driven by a decline in the number of Australian households who purchased apples in the last 12 months – down 1.4 percentage points or 133,000 households to 88.1 per cent.

Despite these challenges, there are pockets of growth to be found in the apple category. In Australia, Pink Lady was the clear winner: it represented over 40 per cent of sales and grew by 5.8 per cent in dollars and 7.2 per cent in volume. Pink Lady growth was driven in part by households switching to Pink Lady from Royal Gala, Red Delicious, and other apples. However, variety is by no means the only avenue for growth; in the U.S., organic apples grew by 5 per cent for the year.

In Australia, Woolworths’ Odd Bunch, and packaged apples specifically targeting kids’ snacking, have also recorded growth. While loose apples accounted for 69.5 per cent of apple category volume sales, Odd Bunch accounted for approximately 3.4 per cent of category volume and dollar sales grew by 13.4 per cent over the past year, while packaged apples for kids grew by 20.2 per cent – albeit off a small sales base. Around one-in-eight households (12.6 per cent) purchased Odd Bunch and a similar number purchased Kids apples (12.9 per cent) over the past year.

Looking at trends in the U.S., we have seen a similar decline in apple sales over the past year (down 5 per cent in dollar sales and 8 per cent in unit sales). Nielsen tracks 45 different apple types in the U.S. and in the past two years the number of apple varieties in U.S. stores has grown 11 per cent.  But with so many different apples, it is possible to create a paradox of choice where consumers become so overwhelmed that they choose to purchase none of the available options.

finding new growth in a mature market

Pears

Volume sales of pears increased significantly over the year up 6.1 per cent, with average price paid at retail down -12.6 per cent as the market cleared through this volume. These lower average prices drove overall annual dollar sales for the pear category down by -7.2 per cent.

Like apples, the pear category also lost shoppers over the past year with the percentage of households buying pears declining from 63.2 per cent of Australian households to 60.9 per cent.

Prices affect how consumers shop and although fewer households bought pears over the year, lower prices encouraged loyal pear buyers to add more kilograms of pears to their grocery basket.  These additional purchases came at the expense of other staple fruit categories with these shoppers switching kilograms purchased to pears from bananas and apples.

While loose pears accounted for 78.5 per cent volume share of the category, similar to apples, Woolworths’ Odd Bunch pears have gained share and now represent 6.6 per cent volume share of total pear sales.

finding new growth in a mature market

finding new growth in a mature market

Understanding heavy, medium and light buyers

One commonality across both the apple and pear categories was that there were a large number of light category buyers. There were an estimated 2.8 million households buying less than 4.5 kilograms of apples over the year, and an estimated 3.7 million households buying less than 1.5 kilograms of pears.  However despite this large number of households, these light buyers accounted for less than 5 per cent of dollar sales for the category.

If these light buyers added just one more shopping trip each year, this would add more than $6.5 million to the apple category and almost $5.4 million to the pear category each year.

Consistently reminding Australian households of the benefits of buying apples and pears, such as health and convenience, could be one way to encourage purchase frequency. And inspiring shoppers to use apples and pears on more occasions through recipe ideas could encourage shoppers to put apples and pears in their shopping baskets more often. Light buyers are more likely to be non-families, so consumer marketing and promotions that appeal to adult households could be effective in increasing purchase frequency among this group.

finding new growth in a mature market

Source:

  • Nielsen Homescan 52 weeks ending 11/08/2018
  • Nielsen US xAOC, UPC+Non-UPC Sales, 52 weeks ending 9/29/18

Further reading:

The Apple of our Eye: Australians love Variety – 23/3/2018 (Nielsen)

Research: What consumers want from apples and pears (The Source/APAL)

Acknowledgement

The Nielsen Harvest to Home dashboard and accompanying reports are outputs of MT17015 Consumer Behavioural and Retail Data for Fresh Produce which has been funded by Hort Innovation using the apple and pear research and development levy, and funds from the Australian Government.

By |November 15th, 2018|Hort Innovation apple and pear marketing, Market insights, News|

About the Author:

Associate Director of Analytics, Nielsen

Chanel is Nielsen's resident fresh expert, and helps to develop winning strategies with clients across produce, meat, seafood, delis, and bakeries.